Amazon to close its Style experiment in ‘ symbolic ’ move
Starbucks launches plan to cut $ 3 billion in costs over three years
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Amazon to close its Style experiment in ‘ symbolic ’ move
Amazon closed both of its Style stores in November , less than two years after introducing the concept . The decision to shut the operation represents another retreat from physical non-food retail following last year ’ s closure of Amazon Books and Amazon 4-Star shops .
This is part of Amazon ’ s wider efforts to curtail ventures that it does not see as having long-term potential or that are not generating good returns for the business . Amazon Style fell firmly into this category , as it was hard to see how the initiative would scale and become a powerhouse of apparel retail .
Amazon Style was an interesting enough concept , with welldesigned and pleasantly merchandised stores . However , the automation of the fitting rooms was an over-engineered solution in search of a problem . Amazon was simply trying to reinvent something for the sake of reinvention and ended up with a business model that was more complex and costly than a regular clothing store .
Unlike most apparel shops , Amazon Style also lacked a distinctive point of view . While it sold some good brands and had an interesting range of apparel , it lacked the personality of most traditional clothing stores so struggled to build a base of regular , loyal customers in the way that other brands do .
As a result of all of this , Amazon will now focus its efforts on selling apparel online – an arena where it has considerable success .
Amazon is not giving up on physical retail entirely , as it is still committed to building out a much bigger grocery business , expanding both Whole Foods and its own-format grocery stores . This is sensible , as a successful grocery operation needs physical stores both to satisfy customers and to drive profitability .
Starbucks launches plan to cut $ 3 billion in costs over three years
Starbucks Coffee Company has announced Triple Shot Reinvention with Two Pumps – a long-term growth plan for brand elevation , global expansion , and cost efficiency .
The company described the strategy as the “ next step in the re-founding of the company ” to deliver significant value to partners , customers and shareholders .
The plan includes three priorities – elevating the brand , strengthening and scaling digital , and becoming truly global – along with “ two pumps ” – unlocking efficiency and reinvigorating the partner culture .
The firm expects to generate $ 3 billion in savings over three years , with $ 2 billion outside the store from the cost of goods sold . This will enable the company to reinvest in the business and deliver returns to shareholders through earnings growth .
Regarding brand elevation , Starbucks will focus on running better stores , growing the portfolio with more purpose-defined stores and renovations , and driving product innovation .
The company intends to double its 75 million global Starbucks Rewards Members within five years and expand digital and technology collaborations to elevate the partner and customer experience . To become a more global brand , it has a goal to reach 55,000 locations across the world by 2030 . The company currently has over 38,000 stores , with about 9000 new openings in the past five years .
Starbucks will also reinvigorate the partner culture through continued investments in the partner value proposition across the partner experience .
For FY23 , Starbucks recorded an eight percent increase in global comparable store sales , with North America and the US up nine percent and international up five percent .
The company ’ s consolidated net revenues rose 12 percent to a record $ 36 billion , excluding a two percent unfavorable impact from foreign currency translation .
CEO Laxman Narasimhan said the company achieved strong results for the fourth quarter and full fiscal year , which are on the higher end of its full-year guidance .
“ As we enter the current year , in the face of macro uncertainty , we remain confident in the momentum throughout our business and headroom globally ,” Narasimhan added . ►
December 2023 www . insideretail . us 9